ICC Secretary General discusses French No vote on CNBC Europe

ICC Secretary General Maria Livanos Cattaui today appeared on CNBC Europe’s Squawkbox show to discuss the aftermath of the French referendum on the European Union constitution. The morning programme, hosted by CNBC presenter Geoff Cutmore, was broadcast live from Paris. Below is an adapted transcript of the interview.

Question: How does the outcome of the referendum in France impact investment and how does the business community feel about doing business in France and Europe as a whole? Maria Livanos Cattaui: I’m not sure there was one single message that came out from the vote yesterday. I think that the “No” vote had many, many aspects to it. What concerns me very much in this respect is what happens next: How can Europe achieve a more competitive business environment? How is Europe going to achieve the necessary business and job creation that it must undergo? How are we going to re-instil confidence? How are people in Europe going to move forward without looking with such trepidation on their future or on the necessary changes that are going to take place? These are some of the questions that I would be asking right now.Q: In the very short run do you expect there will be more reform coming or do you expect some setbacks, at least for a while?MLC: If there are going to be setbacks it’s going to be because of a rise of a very unsavoury populism with its protectionist tendencies. That would be most unfortunate because, as we all know, the more closed a society, the more vulnerable is its economy and that is exactly what we don’t need. How are we going to instil across Europe an appetite and understanding of why reforms are needed? I think that is the greatest challenge facing Europe’s leaders right now.Q: Is it going to be easier to push through reforms, or is it going to be harder?MLC: Clearly it’s going to be harder, but when things are really hard sometimes that’s the chance that true leaders take in order to make things happen because it precipitates the necessary change.Q: The “No vote” is a message to the business community that says workers want more money, they want more protection, they want to work shorter hours in France. None of these are messages that the business community wants to hear.MLC: I also hear many people in France expressing quite different needs. I hear them say: I want more ease to make and start my own business; I want more ease with which to hire people and possibly more flexibility in that; I want an easier atmosphere in the regulatory regime. I hear that as well and sometimes the noise that one hears on one side, especially in the “No vote”, covers a multitude of different kinds of “Nos”, one of which may well be a fear that the status quo is just leading nowhere, into more stagnation.Q: So what should we look at? When would be a good time, what would be a positive sign that we’re going in the right direction and not in this protectionist direction now? What would you expect?MLC: I have voiced my fears, not necessarily what I think might happen. We are going to have to look at the next days and the next votes. I think that Jack Straw wisely said: “let’s assess what’s happened, let’s sit back for a moment, let’s not precipitate action.” In my view, what has been lacking has been courage and a clear, powerful, public communication regarding the reasons that political leaders, business leaders and ordinary citizens believe they have to modernise and undergo reforms. We cannot remain so uncompetitive in today’s world. We cannot be so afraid of competition and of the next steps. These voices are not always standing up and speaking out as they should.Q: Two major centres of power in Europe have struggling political leadership: France and Germany. That is not a message that the business community is going to be very comfortable with.MLC: That is not the most comforting of messages, especially in the view of those who feel that something has to be done if we’re going to even face the Lisbon Agenda and address the issues. But I also visit Central and Eastern Europe, and the feeling there is very different. What you see in Germany and in France is not necessarily indicative of what you see everywhere. There are other countries where the people have a more aggressive feeling towards their future, where they look at it with a much more “we can do it” attitude. People in some parts of Europe are fed up with some of the status quo and the entrenched way of doing things in some of the larger areas. It is going to be interesting to see which vision of Europe triumphs.